Payday Anomaly

8 Pages Posted: 10 Oct 2018

See all articles by Aixin (James) Ma

Aixin (James) Ma

Oklahoma City University - Meinders School of Business

William R. Pratt

Oklahoma City University

Date Written: September 28, 2018


Abnormal returns have been found on days near the turn of the calendar months. Previous studies have linked the phenomenon to month-end paychecks, of which a sizable proportion goes into employees’ retirement accounts and is then automatically invested in the market. Since many institutions adopt a semi-monthly pay schedule, we test the hypothesis that the market should exhibit detectable mid-month abnormal movement. Our results indicate that the 16th day of the month statistically and economically outperforms all other calendar days except the 1st and 2nd. As more and more institutions transition into bi-weekly pay schedule, however, the mid-month payday anomaly becomes less prominent.

Keywords: Abnormal Return, Anomaly, Payday, Mid-Month, Market Efficiency

Suggested Citation

Ma, Aixin and Pratt, William Robert, Payday Anomaly (September 28, 2018). Available at SSRN: or

Aixin Ma

Oklahoma City University - Meinders School of Business ( email )

2501 North Blackwelder
Oklahoma City, OK 73106-1493
United States
405-208-5827 (Phone)

William Robert Pratt (Contact Author)

Oklahoma City University ( email )

2501 N Blackwelder
Oklahoma City, OK 73106
United States

Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics